Elizabeth Guider explores the shifting demand for U.S. scripted series abroad amid a booming SVOD landscape, complex rights deals and a new golden age for European drama.
A hot American show like Designated Survivor years ago would have been a surefire fit on flagship terrestrial stations across Europe, but not in today’s topsy-turvy media mash-up. Instead, the Kiefer Sutherland topliner (which airs stateside on ABC) was scooped up in a global play by Netflix, which outbid several other contenders for a first international window. A quintessentially American comedy like Parks and Recreation might not even have found an audience abroad in years past but nowadays is tickling foreign funny bones thanks to a deal with Amazon.
Other things have changed too. Critically acclaimed cable darlings like HBO’s The Night Of and Westworld and Showtime’s Billions and The Affair are adding spice to pay services abroad, like those in the Sky portfolio. A hip, basic-cable show like Mr. Robot (which airs on USA Network in the U.S.) is being put through its paces in an array of SVOD deals around the world. The spy series Berlin Station, which hails from Paramount and airs on EPIX in the U.S., has clinched time slots on HBO Nordic and HBO España as well as on TIMvision in Italy. And Nashville, the country-music-inflected drama, which one might have assumed a long-shot for overseas delectation, has held onto most all its international slots despite a glitch last year that saw the series migrate from ABC to cabler CMT back at home.
If it was once true that U.S. dramas dominated prime time on top-tier terrestrial stations, from ITV and TF1 to RTL, RAI and RTVE, that is no longer necessarily the case. At the beginning of April, only a handful of American series enjoyed prime-time slots on one or more of those flagships—Grey’s Anatomy and Chicago P.D. on TF1, Bones on RTL and Lethal Weapon on ITV, among them.
More noticeable in prime time overseas are the various formatted versions of shiny-floor reality stalwarts like Dancing with the Stars as well as iterations of the long-running Bachelor franchise.
It goes without saying that the bread and butter of all the leading terrestrial broadcasters abroad is homegrown fare, much of which is increasingly well-made and ambitious in scope.
This all means that getting top dollar for American fiction was arguably easier, and faster, a decade ago than it is today. The sequencing of such series in the international market is now a crazy quilt of options, locally, regionally and globally, complicated by exclusive and non-exclusive arrangements, variable window durations, and a dizzying adjunct of stacking, catch-up and box-set rights to sort out.
If a Hollywood seller of TV series gets these calculations right, top dollar is still achievable, but no one in the business says it’s a slam dunk. That’s why, barring (an increasingly rare) bidding war at the L.A. Screenings, deals for fall-season hopefuls unveiled to buyers at the end of May tend to be sealed later in the year—not until November in many cases.
“You definitely have to work harder to exploit your assets across many more platforms, and you have to be more creative in sequencing them,” says Peter Iacono, Lionsgate’s president of international television and digital distribution. “You can still scale the same monetary heights, but spikes (as in prime-time slots on free-to-air broadcasters) are harder for everybody to secure.”
Iacono goes on to explain how Lionsgate has made a concerted effort to field one of the most eclectic slates available, ranging from the aforementioned Nashville to an upcoming reality contender for CBS based on the Candy Crush Saga internet sensation. “That’s why we tend not to favor traditional output deals abroad as our offerings tend to run a wide gamut: the same buyer is not likely to want both Mad Men and Girls Gone Wild, for example.”
Moreover, as Iacono and others point out, those very flagship terrestrial stations overseas are no longer the be-all and end-all in their markets, just as the five broadcast networks in the U.S. are no longer the only game in Tinseltown. Ratings for the established free-to-air broadcasters around the world have inevitably slipped as competition for eyeballs and ad dollars has picked up.
The increased production of U.S. scripted series—which may hit a mind-boggling 500 this year—means that most seasons offer a plethora of quality fiction for foreign buyers to choose from. The crème de la crème, per both buyers and sellers, still command healthy license fees, especially those that are broadly targeted and skew more female—think Warner Bros.’ Blindspot, Sony’s The Blacklist, CBS’s NCIS, Disney’s Grey’s Anatomy or Fox’s This Is Us, among others—and can claim a grip in prime time on many foreign broadcasters. More male-skewing, narrowly targeted fare, especially some of the slickly produced series for the 18-to-34 demo, often, not surprisingly, solidify slots on young-skewing platforms like The CW in the States. Lesser fare—those shows that don’t rate well stateside or don’t measure up to the increasingly algorithm-inspired criteria by which potential customers size up likely performance on their own services—often have to settle for modest financial returns or even languish on the shelf.
“No question, the world has drastically changed,” opines Keith Le Goy, the president of distribution at Sony Pictures Television. “Audiences keep fragmenting yet viewers are finding a growing variety of things, just in different lanes, as it were.” He cites a broader range of potential buyers and robust growth of digital platforms abroad as helping to keep the overall market buoyant, notwithstanding the glut of product from which buyers can now choose.
Consider that the very description of deals has now morphed into near meaninglessness. Traditional output deals guaranteed a foreign customer (lucky enough to secure or obligated to take, depending on one’s point of view) the virtual totality of a Hollywood supplier’s output. The past decade or so saw a shift to so-called volume deals, whereby a foreign customer in each territory contracted to take only a limited number of series (four to six is typical) and in some cases got to cherry-pick and/or reject which ones. Even those arrangements would seem to be dwindling, though, with the arrival of voracious upstart streamers that have greater need to bulk up fast with acquired content in order to make an impact on potential subscribers.
“All these extra options in the foreign market are spurring the growth prospects for our portfolio,” says Don McGregor, the executive VP of television distribution at NBCUniversal. “It’s rewarding to match shows to a similar branded outlet and the right audience.”
After nearly 20 years in the business, McGregor adds, it’s becoming clear that narrowly targeted outlets are opening up possibilities for content to gain traction as never before. In addition to the plays made for Mr. Robot, he points to deals for an array of children’s animation, for comedies like Brooklyn Nine-Nine and for sci-fi hits such as The Magicians that in previous decades might not have found an audience outside the U.S.
“Now we can place shows such as these. If all we had were linear channels, we wouldn’t have these opportunities. New technology and devices and greater viewer sophistication have spurred the growth for us,” McGregor stresses.
Not that anyone is saying the effort of wooing linear broadcasters is not worth the proverbial candle. Procedurals, for example, perform in some instances better abroad on key terrestrial players than they do stateside. Producer Dick Wolf’s long-running Law & Order: SVU, for example, still attracts solid audiences on various terrestrials abroad. But after 17 seasons, the Mariska Hargitay topliner more often than not airs in slots adjacent to prime time on TF1 and Italy’s Mediaset, while in the U.K. and Ireland it has shifted to Universal’s eponymous channel. The situation is more complex for Wolf’s quartet of Chicago series, which are a hybrid mix of procedural and serialized elements. In the U.K., for example, Sky airs Chicago Fire, Channel 5 broadcasts Chicago P.D., and Chicago Justice and Chicago Med have secured homes on Universal Channel.
“We think of these broadly appealing mass-market outlets as demanding accessible story lines and high production values in their acquisitions,” points out Stuart Baxter, the president of Entertainment One (eOne) Television International. “As a general rule, their purchases skew more female and a little older.”
The eOne-produced You Me Her has gained a foothold on Netflix’s global platform. All told, no show’s eventual home(s) or longevity is a foregone conclusion.
“What amazes me of late is the speed of change in our business,” Baxter adds. “The models for exploiting product are constantly in flux and newcomers to the fray keep popping up.” He cites, among others, Southeast Asia’s iflix, which is making significant inroads not only in that region but more recently in the Middle East. “It’s a legitimate emerging alternative that we have to pay attention to.”
One of the pleasant surprises recently in what is an increasingly complicated market is the addition of an entirely new layer of competition—namely from telcos like SFR, Bell and Vodafone as well as from innumerable VOD pop-ups in China. So opines Charles Schreger, the president of programming sales at HBO. “Every decade we tend to think the end of competition has arrived: after commercial broadcasters started challenging pubcasters in Europe, for example, or after that when cable and pay-TV players jumped into the fray, and then when SVOD services started getting launched. But competition never really ends, which is what makes the business so invigorating.”
Schreger’s portfolio has, up until now, lent itself to the bolstering of the pay-cable or satellite-delivered services that have caught on pretty much around the globe. The paybox’s output of fiction, especially its serialized hours, tends to be thematically layered and often edgy and, as such, has helped form the backbone of many of these overseas services. “I’d say these customers take virtually all of our content. Currently, we have such exclusive arrangements most everywhere around the world, Turkey being one of the notable exceptions,” Schreger explains. (HBO licenses on the open market in that territory.) He also points out that the service does a fair amount of windowing with its established partners as many of them, starting with Sky, now have multiple uses for product within their own platforms.
As for the L.A. Screenings, “we participate opportunistically,” Schreger notes, since HBO doesn’t always have a new fiction series to unveil to customers in May.
Outside consultants reckon that HBO receives top dollar for its highest-profile dramas, but Schreger would not be drawn on financial returns from his international deals.
Not that any U.S. seller will talk specifics when it comes to revenues raked in from the international market (nor are there any official tallies publicly available). However, most Hollywood content suppliers will allow that the dollars that come in from abroad are “essential” to offset the deficits that stateside production typically entails. Especially the deficits of their hour-long dramas, which increasingly employ top-tier talent (including stars from the indie film trenches) and aspire to a similarly pricey cinematic look and feel.
Many of the drama pilots on display at the Screenings, for example, now come across as mini-movies—noisy, sexy and intense to varying degrees. As such, buyers make a point of not being overly enthused by the experience of seeing them on the big screen and insist on ascertaining that the pilot aptly teases the quality of subsequent episodes.
A trio of media consultants have variously pegged the overall haul for the six Hollywood majors from their international deals as between $7 billion and $9 billion a year; another $1.5 billion to $2 billion should be factored in for the content that independent U.S. players supply to the foreign market.
Whatever the pressures and the challenges, big business it is.
As for what to expect this go-round at the Screenings, one outside consultant says he expects the Europeans might bring up the slide in the euro (and the Brits, the pound) against the dollar this past year as a negotiating tactic. Still, he reminds, currency fluctuations have been around since the dawn of coinage, so he doubts that the dips will significantly impact ongoing deals. (In recent years, Latin America and then Russia went through such gyrations and the level of program buying did drop off temporarily in those regions.) “Most of the major European players are coming off good financial results though, so I don’t think this will be a winning strategy or long-lasting situation.”
Pictured: Warner Bros.’ Riverdale.